Discussing Your Estate with Family

Having this conversation before your death, when choices can be explained, will help avoid the potential relationship damage that can
happen if no one is aware or understands
your decisions.

Choose the Right Person for the Right Job
While you are likely to consider the feelings of your family members, try to take the emotion out of your decisions and select the people who will be best at certain tasks. Once people understand the various roles and what they entail, they tend to understand why a particular person was selected. The roles can range from
being the executor of the estate, to the guardian of your children, to making medical decisions on your behalf.

Prepare the Appropriate Documents
Once you have determined who will handle the key roles, you will want to get the proper paperwork drafted and notarized. These documents may include: your will, trust, 
durable power of attorney, healthcare power of attorney, and guardianship designations.

Prepare for the Conversation
You’ll want to take the time to think through this conversation and anticipate the questions people will have.

You will want them to understand what your goals are for the estate plan, what the various roles are and what they entail, and why certain people were chosen for certain roles. It is important to think through your family dynamic
in approaching this conversation. Should it be a more formal conversation that includes an attorney or financial advisor to help explain the roles and your choices? Should it be more casual discussion around the dinner table with only family?

Either way, you will want to make sure you set ground rules to avoid confrontation. You will want people to express their thoughts but if it becomes argumentative, let them know the
meeting will be canceled until it can be
discussed rationally.

Keep the Conversation Going
Let your family know that this will be an ongoing discussion as circumstances change, such as new marriages, new children, divorce, etc. By having regular conversations, you can avoid the “Mom would have wanted this” argument. Setting this expectation can help prevent future family tension.

Distributing Personal

Dealing with major assets may be so time consuming that you don’t even think about your personal possessions, leaving distribution
decisions up to your heirs. But disputes over personal possessions are more apt to cause conflict. Some items to consider include:

Take time to think about who should receive treasured personal possessions. You might want to detail your wishes in a separate letter to your heirs to prevent disagreements.

Ask your heirs what possessions are important to them. Otherwise, you may inadvertently give a treasured possession to one child without realizing its importance to another child.

Don’t distribute assets based on arbitrary criteria. You don’t necessarily have to give your jewelry to your daughter or  your tools to your son.

Devise a method for heirs to distribute personal possessions. After you have determined how to distribute your most valued possessions, detail a method for heirs to distribute the rest of your possessions. It can be as simple as having heirs take turns selecting items or flipping a coin.

Financial Thoughts

Previously active investors who are unaware that they have experienced a decline incurred roughly a 15% loss in financial wealth. Inactive investors experienced about 6% in financial losses. More than half of the average loss was attributable to a decrease in the value of stocks, mutual funds, and investment trusts (Source: AAII Journal, November 2020).

The Employee Benefit Research Institute analyzed 401(k) plan balances for consistent participants for the years 2010 through 2018. The average 401(k) plan account balance increased at a compound average annual growth rate of 13.9% from 2010 to 2018, for an average increase from
$63,756 to $180,251. The median account balanced increased 17.3% over the same time period, to $90,015 at the end of 2018. Two thirds of 401(k) participants’ assets were invested in equities, with younger participants having a higher allocation to equities than older participants. Fourteen
percent of participants were in their 20s and 13% were in their 60s (Source: AAII Journal, November 2020).